BRUSSELS May 13 Euro zone policymakers will
press Slovenia on Monday to toughen measures presented last week
to tackle its banking and fiscal problems and so avoid becoming
the sixth member of the currency bloc to require a bailout.
Slovenia pledged last week to sell 15 state firms and raise
value-added tax in a bid to avoid seeking international aid, but
gave little detail and delayed the spending cuts investors say
are needed to stabilise its finances.
Its largely state-owned banks are choking on 7 billion euros
($9.08 billion) in bad loans and need to be recapitalised.
German Finance Minister Wolfgang Schaeuble said on Monday
the former Yugoslav state may get by without help, but European
Union officials said privately that the measures outlined by
Ljubljana last week were not enough.
"Slovenia says ... they need no programme. I think they are
right but they need to put in place the right measures,"
Schaeuble told reporters as he arrived for a regular meeting of
euro zone finance ministers.
"That isn't easy, not for any country."
Ministers were not expected to reach a decision about
Slovenia's prospects on Monday.
"We will have to push them on it," said one EU official,
speaking on condition of anonymity. "It's not enough yet."
"It is still not a consistent and forceful programme,"
another official said.
With Slovenia's economy among the fastest-growing in the
euro zone, which it joined in 2007, successive governments shied
away from unpopular sale of state assets, including the banks,
and reform of the welfare system and rigid labour market.
But rising bad loans following the global financial crisis
exposed a culture of cronyism and corruption in which state
banks made risky loans to politically connected businessmen.
The government's reform plans include the transfer of 3.3
billion euros of bad loans held by its three biggest banks -
NLB, Nova KBM and Abanka Vipa, which are
all state-controlled - to a newly established "bad bank".
The banks, which hold the lion's share of the bad loans
burdening the sector, will receive in return state-guaranteed
bonds with a total value of 1.1 billion euros.
($1 = 0.7709 euros)
(Reporting by Jan Strupczewski, additional reporting by Annika
Breidthardt and Robert-Jan Bartunek; Writing by Jan Strupczewski
and Annika Breidthardt; Editing by Catherine Evans)